Colorado's oil industry is facing an existential battle with news announced Wednesday that an initiative significantly curtailing oil and gas production has made its way on to the state ballot for a vote this Election Day.
The big picture: Colorado, a political battleground, is America’s fifth-largest gas-producing and seventh-largest oil-producing state. Layer on top of that a growing population colliding with an increase in fracking — a controversial extraction technique for oil and gas — and it’s ripe for this controversy. Two similar efforts to get similar initiatives on the ballot in 2014 and 2016 failed.
One level deeper: The initiative would increase a buffer zone between buildings and future drilling from 500 feet to 2,500 feet, and expand it to other "vulnerable" areas, which could encompass rural areas. The industry points to a state government agency study concluding the initiative could cut off as much as 85% of the state's future energy development on non-federal lands.
What we're watching: The news impact on stocks of publicly traded companies with big footprints in Colorado, including:
- Anadarko
- Extraction Oil and Gas
- Noble Energy
- PDC Energy
- SRC Energy
What's next: If it passes, expect it to galvanize activist environmentalists to renew calls to ban fracking in other regions of the country — and raise big issues for oil companies with substantial footprints in Colorado.